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Telstra succeeds in stopping Optus’ comparative advertisements

Telstra successfully obtained an injunction against Optus in relation to Optus’ advertisements, which made specific comparisons regarding network coverage. Telstra alleged that the representations as to network coverage were false, misleading or deceptive.

Background

From November 2013, Optus ran specific advertisements containing representations with respect to its network coverage. However, commencing 29 January 2014, Optus advertised on television and on its website an update that its network reaches 98.5 per cent of Australians, while Telstra’s network reaches 99.3 per cent. An image – a map of Australia – was displayed when making this representation. In the television advertisement, the image was accompanied by a voice over “When itcomes to the percentage of Australians theOptus mobile network reaches, there isn’tmuch difference between us and Telstra. Infact, it’s less than 1%.”

Within two weeks, Telstra sought an injunction in relation to the advertisement alleging that Optus’ representations with respect to coverage were false or likely to mislead and/or deceive.

Representations

Telstra suggested that the advertisement effectively contained three representations:

The Optus mobile network and the Telstra mobile network cover 98.5% and 99.3% of the Australian land mass respectively (“the First Representation”).

The Geographic Coverage of the Telstra mobile network is less than 1% greater than the Geographic Coverage of the Optus mobile network (“the Second Representation”).

The difference between the coverage (alternatively the Geographic Coverage) of the Telstra mobile network and that of the Optus mobile network is minimal and insignificant (“the Third Representation”).

Issues

The central issue was the concept of coverage, which could be understood with reference to population (“Population Coverage”) as well as Geographic Coverage. Telstra’s problem with the advertisement was that by using the map of Australia together with the percentages and the voiceover, Optus was making representations with respect to Geographic Coverage which were likely to mislead or deceive. Telstra claimed its network is 2.3 million square kilometres in geographic area, covering 28 per cent the Australian landmass, while the Optus network is about 1 million square kilometres.

Telstra did not lead evidence that any consumer was misled. Hence, its case was put to the Court on the basis that consumers were likely to be misled or deceived. This was especially the case given that consumers place significant reliance on coverage in choosing a carrier.

In response, Optus focused on the fact that the voiceover made reference to “Australians”, as opposed to “Australia”, and that, in turn, the representation was with respect to Population Coverage and not Geographic Coverage.

The Court had to consider the relevant concepts and the effect of the representations in the absence of any evidence from consumers. As part of this process, the Court considered the representations both objectively and with reference to the class of consumer likely to constitute the target audience.

Decision

The Court agreed with Telstra that the three representations were made, and that the dominant message and effect of the representations were that consumers would have understood them with reference to Geographic Coverage. Emphasis was placed on the fact that percentages were incorporated into the image of a map of Australia.

The Court noted that no imagery was used to signify people, and that no clarification was made with respect to Geographic Coverage.

Optus had submitted that there was very little substantive difference between the advertisements run in November 2013 as opposed to the January advertisements. For example, the voiceover was identical. However, the crucial difference was that no image of a map of Australia was present in the original advertisements.

Optus also complained that Telstra had run similar advertisements in the past, including with reference to an image of a map of Australia. The Court considered those advertisements and was able to distinguish them on the basis that Telstra had made representations as to both Population Coverage and Geographic Coverage, and had used the map when discussing Geographic Coverage. The Telstra advertisements were also confined to the internet, with exposure to a different class of consumers.

In imposing its decision, the Court noted that Telstra ran advertisements drawing attention to the issue and specifically compared Telstra’s Geographic Coverage to Optus’ Geographic Coverage. Optus altered its advertisement, with the image of the map replaced with imagery with respect to population.

The Court ordered corrective advertising in order to address the false and incorrect impression which has created an ongoing misapprehension amongst the target audience. Interestingly, corrective advertisements weren’t required to run on television (where the advertisement had aired). Rather, Optus was ordered to display corrective notices in newspapers, at Optus stores and on its websites for a month.

Summary

When considering advertisements and marketing campaigns and whether they are misleading or deceptive, it is important to remember that the alleged conduct should be considered as a whole and in its full context. Whilst the script in the Optus advertisement specifically referred to “Australians”, it was accompanied by an image of a map of Australia, creating an impression relating to Geographic Coverage.

There are inherent risks when making claims about a competitor’s goods and services, unless of course such claims can be substantiated or are of a very broad nature. As this case demonstrates, a business can be held responsible for their advertising campaigns, whether by a competitor or a by regulator, including the ACCC. Those risks also extend to advertising agencies. Timely advice should be sought on advertising campaigns both at early concept development stages and also at near final production stages. Getting advice before the campaign goes live assists in minimising risk and avoiding liability.

Compare jurisdictions:Litigation: Enforcement of Foreign Judgments

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